In a sealed new court filing, Georgia Angelos sought to take emergency control of her husband’s law firm and claimed through her lawyers that the firm is at risk of losing control of its bank accounts, including the IOLTA trust accounts.
The lawyers for Georgia Angelos said in court Wednesday that the firm is at risk of a “catastrophe” if the bank freezes the accounts.
The storied firm was built on decades of asbestos-related litigation, but its future has come into doubt since its longtime owner, 93-year-old Peter Angelos, fell ill in 2018 and lost the ability to manage his business interests, including his majority stake in the Baltimore Orioles.
The loss of his leadership has led to a bitter legal dispute between his two sons, Louis and John Angelos. Louis Angelos, who is a lawyer, claims that he is now the rightful owner of his father’s firm. Louis Angelos argued in new filings that his father intended for him to take over the firm and that his mother and brother have no authority to run the firm because they are not lawyers.
Louis Angelos also claims to have sold himself the firm, at a price to be determined later, through a promissory note.
John Angelos, with whom his mother, Georgia, has sided in the litigation, claims that Louis Angelos had no authority to buy the law firm and repeatedly ignored his family’s efforts to either sell the firm or to unwind its operations. Peter Angelos had no partners and did not intend for the firm to continue operating after he was no longer at the helm, Georgia Angelos has claimed in court papers.
Georgia Angelos has asked a judge to invalidate Louis Angelos’s sale of the firm to himself and to affirm that she has authority to handle the law firm as her husband’s sole attorney-in-fact.
Wednesday’s court hearing offered the first hint that the law firm’s bank accounts are at risk of being frozen by Wells Fargo. Georgia Angelos’s emergency motion for control of the firm was filed under seal, so it is not available to the public.
In court, however, her lawyer, Joseph Jay, said Georgia Angelos had become aware of the problem in the last week and needed to take over the bank accounts so that the firm could address the issue with Wells Fargo. Jay proposed that Georgia Angelos be allowed to appoint a managing partner to run the firm.
Control of the firm could also be handled through a trust or a court-appointed manager.
It is not clear why Wells Fargo might seek to freeze the bank accounts, including seven IOLTA accounts. The firm would not be able to operate if the accounts are frozen, lawyers said Wednesday.
Paul Raschke, one of the lawyers for Louis Angelos, said in court that Louis is in communication with Wells Fargo in order to assure the bank that his purchase of the law firm was legitimate. Raschke said the law firm should continue to be run by Louis Angelos as it has for the past four years.
Raschke also defended Louis Angelos’s sale of the law firm to himself, which included a purchase price to be determined later by an appraiser and a due date for the payment of 2037.
“Nobody’s going to suggest that Lou Angelos has the kind of cash on hand to buy this law firm outright,” Raschke said.
Baltimore County Circuit Judge Keith R. Truffer declined to rule on the emergency motion at Wednesday’s hearing. He scheduled a hearing on the request — and on a request to close the courtroom so that the hearing can take place in secret — for Oct. 20.
The family dispute first came into public view this summer, when Louis Angelos filed a lawsuit against John Angelos alleging that John had manipulated their mother and was exerting unilateral control over the Orioles and the family’s other business interests, including the law firm. Louis Angelos claimed in court papers that his brother intended to dismantle the law firm in part because he was concerned about liability arising from a pending malpractice lawsuit in Baltimore City Circuit Court.
Truffer also set a trial date of July 10, though he also encouraged the parties to pursue mediation. The trial is expected to last for a month.